Bitcoin at $146K? JPMorgan Thinks So...

Plus: Square, a16z swing hard against U.S. Treasury's wallet rule proposal.

January 5, 2021 The top stories in bitcoin, crypto and more – all in one place, delivered daily. Sponsored By: By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  Top shelf Hello. A late night interpretative letter from the Office of the Comptroller of the Currency (OCC), the U.S.' federal banking regulator, saying banks can act as stablecoin nodes was the juice needed to push bitcoin out of the doldrums. JPMorgan analysts see a future where 1 BTC could trade hands near $150,000, according to a new report.    In other regulatory news, the comment period for a controversial wallet rule closed, with many heavy hitters coming out against the U.S. Treasury's proposed rules to increase exchange surveillance. More on that later, first the top stories for the day.   Banking on stablecoins A new letter from the U.S. federal banking regulator could give stablecoin networks the same status as other global payments networks like SWIFT or FedWire. In a last act from Acting Comptroller Brian Brooks, U.S. banks can now operate as stablecoin nodes and are free to send transactions, so long as they comply with securities and other regulations. Bitcoin markets rebounded on the news. Supply crunch Bitcoin mining machine prices are soaring along with bitcoin's price. According to data reviewed by CoinDesk, a surge in mining revenue, limited manufacturing capacities and a number of new mining entrants has led to a supply shortage. It doesn't help that established players like Riot and Marathon (both publicly traded) have been buying up the most up-to-date ASICs miners. Brazil's market The battle to control Brazil's growing crypto retail sector is heated, with Argentina's Ripio acquiring BitcoinTrade, the second-largest crypto exchange in South America's largest economy. Last month, Mexico City-based crypto exchange Bitso raised a $62 million funding round, a chunk of which was earmarked for a Brazil push, the company said. SPONSORED BY NEXO Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring:    * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * Full flexibility with no lock-in periods, so you can withdraw your funds anytime. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo. Get started at nexo.io Big year. Bitcoin. DeFi. Ethereum 2.0. The biggest trends in crypto this year began to move the needle in the rest of the world. Multi-billion dollar funds bought bitcoin as an inflation hedge. Institutions began discussing the merits of decentralization. And the banking sector warmed to crypto.    CoinDesk's 2020 Year in Review covers the major events, ideas and themes in crypto, and why they matter. The series is a comprehensive collection of op-eds, essays and interviews from some of the biggest names in crypto, published throughout the month. Read more on how 2020 was crypto's biggest year yet. Quick bites   RIPPLE EFFECT: Grayscale drops XRP from Large Cap Crypto Fund following Ripple/SEC suit. (CoinDesk) TRADEBLOCK BUY: CoinDesk has acquired institutional analytics and data provider TradeBlock. (WSJ) MINING PIVOT: Two former Canaan directors are helping a Chinese mobile gaming company enter the crypto mining sector. (CoinDesk) VOYAGING OUT: Cryptocurrency broker Voyager Digital says Q4 revenue is expected to reach around $3.5 million, an increase of 75% from the previous quarter. (CoinDesk) TOKEN GENERATOR: Crypto exchange LCX is now licensed in Liechtenstein to help banks create their own digital assets and security tokens. (CoinDesk) FIRST MOVER: DeFi keeps astounding. (CoinDesk) KNOWN UNKNOWN? One River has completed "one of the largest digital asset trades in history," according to facilitator Coinbase. The amount is unknown. (Decrypt) Most influential Looking to make someone (or just yourself) happy this yuletide holiday? Give the gift of crypto art.   As part of the launch of Most Influential 2020 list, CoinDesk is auctioning off 12 original artworks that accompany this year's list of honorees.   The NFTs were created by leading digital artists including Alotta Money, XCopy, Osinachi, Matt Kane, Sarah Zucker, Yonat Vaks and Olive Allen. They are available at Nifty Gateway and Super Rare (Matt Kane). The artists will donate 50% of the proceeds to charities of their choice, under an arrangement with cryptocurrency donations company The Giving Block.   Learn more about the Most Influential 2020 NFT art auction, running to Dec. 31. The list Who moved the needle on crypto this year? What were the projects that mattered? Who shattered the glass ceiling and broke the mold?   From DeFi to bitcoin's late year surge, 2020 was full of big stories, trends and personalities. We've unveiled CoinDesk's 2020 Most Influential list, a selection of 12 people who helped push the industry forward this year. See who made the list. Market intel Gold bugs A new investment report from JPMorgan has set a $146,000 price target for bitcoin. The bullish target is the latest analytical note that wagers bitcoin will become a popular alternative to gold. "Bitcoin's [current] market capitalization of around $575 billion would have to rise by 4.6 times – for a theoretical Bitcoin price of $146,000 – to match the total private sector investment in gold via exchange-traded funds or bars and coins." The one thing holding the bitcoin beast at bay? Volatility.  At stake 11th hour? A comment period for a proposed set of rules that would increase reporting requirements for crypto exchanges and minimize blockchain user privacy closed yesterday, with many major crypto firms rejecting the maneuver.   Spearheaded by the U.S. Treasury Department in December, but shaped primarily by the global Financial Crimes Enforcement Network (FinCEN), the set of rules would see exchanges implement know-your-customer (KYC) requirements for transactions sent to unhosted wallet addresses, or addresses that exist outside a centralized or custodial setting.   This would mean many types of personal wallets as well as counterparties to exchanges' customers would need to be identified. Reporting limits would be set for private wallets that receive more than $10,000 in 24 hours, and record-keeping rules for transactions valued at over $3,000. FinCEN and the Treasury Department claim the increased surveillance will aid criminal enforcement and reduce financial malfeasance.   The proposal was rushed out late on Friday, Dec. 18 – a week before many U.S. employees might expect to break for the winter holiday season – with the Treasury setting only a 15-day comment period. Many crypto industry commentators referred to the rushed timeline as onerous and potentially illegal.   Still, some 6,000 comments were filed with FinCEN within this narrow window, with firms such as Square, Andreessen Horowitz (a16z), Kraken as well as civil liberties organizations including the Electronic Frontier Foundation (EFF) and Coin Center coming out hard against the proposal. The reporting period has since been "extended" until Jan. 7.   "The process itself is fraught with an 'us-versus-them' hostility to the industry's views—as seen by the breakneck schedule for a major rule, the thinness of Treasury's justifications, and the lack of meaningful engagement before the eleventh-hour holiday rule making," cryptocurrency platform Coinbase said, in a prepared statement.   While the rushed timeline was a frequent target – the rule was proposed as United States Secretary of the Treasury Steven Mnuchin is set to leave office – others noted the perverse effects these new reporting requirements could have for the fledgling crypto industry.   "This creates unnecessary friction and perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions, driving them to use non-custodial wallets or services outside the U.S. to transfer their assets more easily," Jack Dorsey, CEO of payments company Square, wrote. In a press release, Kraken noted the proposed rule would be a "substantial departure from existing law." And one, that if passed, Coinbase and a16z have pledged to fight in court. In defense of the proposal, CoinDesk columnist and financial blogger John Paul Koning tweeted that the rules would bring the crypto industry in line with practices already in place for money transmitters, like those followed by remittance giant MoneyGram.   "Coinbase sending cryptocurrency to an unhosted address is like MoneyGram remitting physical cash to a stranger. MoneyGram has to collect personal information about the stranger. Shouldn't Coinbase have to collect information about the unhosted wallet?" Koning wrote.   In response, Coin Center Director of Research Peter Van Valkenburgh, wrote, "equating a blockchain transaction to a funds transfer ignores the obvious difference... blockchain transactions can happen peer to peer while wires are always intermediated." Indeed, there are notable differences between the two systems of value transfer. With blockchains providing a public ledger of all transactions, an increased reporting rule could be a great intrusion into an exchange user's financial privacy than simply identifying the recipient of a remittance – the total history of both counterparties financial lives would be on full view, including those that are unrelated to any centralized exchange.   As the EFF said in its statement against FinCEN's rules: "Anonymity is important precisely because financial records can be deeply personal and revealing: they provide an intimate window into a person's life, revealing familial, political, professional, religious and sexual associations." Who won #CryptoTwitter? ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. 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